BESOR AMCM ENGLISH FOR JUNE 2013 FINAL 1 › cn › uploads › ueditor › file › ... · At 30...

Banco Espírito Santo do Oriente, S.A.

Financial Report

2

Unaudited information (Expressed in Macau Patacas)

BANCO ESPÍRITO SANTO DO ORIENTE, S.A.

Balance sheet as at 30 June 2013

ASSETS GROSS ASSETS PROVISIONS

DEPRECIATION & AMORTIZATION

NET ASSETS

CASH 287,767.81 287,767.81

DEPOSITS WITH AMCM 99,542,564.94 99,542,564.94

VALUES FOR COLLECTION 17,441,750.00 17,441,750.00

DEPOSITS ON DEMAND WITH LOCAL CREDIT INSTITUTIONS 1,667,590.55 1,667,590.55

DEPOSITS ON DEMAND WITH FOREIGN CREDIT INSTITUTIONS 119,839,872.48 119,839,872.48

OTHER VALUES 95,209.26 95,209.26

LOANS AND ADVANCES 726,834,934.02 (211,803.00) 726,623,131.02

PLACEMENTS WITH LOCAL CREDIT INSTITUTIONS - -

DEPOSITS AT CALL AND AT TERM ABROAD 2,504,795,980.00 2,504,795,980.00

SHARES, BONDS AND OTHER SECURITIES 67,225,725.99 (49,589.00) 67,176,136.99

DEBTORS 1,245,189.50 1,245,189.50

OTHER APPLICATIONS - -

INVESTMENTS 190,000.00 190,000.00

EQUIPMENT 3,192,323.84 (3,029,903.72) 162,420.12

DEFERRED EXPENDITURES 183,395.56 (137,526.00) 45,869.56

INSTALLATION EXPENDITURES 4,316,303.50 (1,545,949.00) 2,770,354.50

CONSTRUCTIONS IN PROGRESS -

-

INTERNAL ACCOUNTS 20,885,041.03 20,885,041.03

TOTAL 3,567,743,648.48 (4,974,770.72) 3,562,768,877.76

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Unaudited information (continued) (Expressed in Macau Patacas)

Balance sheet as at 30 June 2013 (continued)

LIABILITIES SUB-TOTALS TOTAL

DEPOSITS ON DEMAND 111,582,851.37

FIXED TERM DEPOSITS 1,377,740,133.80

PUBLIC SECTOR DEPOSITS 1,545,352,659.40 3,034,675,644.57

BORROWING FROM LOCAL CREDIT INSTITUTIONS 10,000,000.00

CHEQUES & PAYMENT ORDERS 17,515,594.03

CREDITORS 561,594.52

OTHER LIABILITIES 142,762.13 28,219,950.68

INTERNAL ACCOUNTS 34,840,869.51

PROVISIONS FOR OTHER RISKS AND CHARGES 9,725,634.00

SHARE CAPITAL 200,000,000.00

LEGAL RESERVES 46,949,744.79

OTHER RESERVES 112,873.04 291,629,121.34

RESULTS CARRIED FORWARD 180,989,444.41

PROFIT FOR THE PERIOD ENDED 27,254,716.76 208,244,161.17

3,562,768,877.76

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Unaudited information (continued) (Expressed in Macau Patacas) Balance sheet as at 30 June 2013 (continued)

MEMORANDUM ITEMS AMOUNT

VALUES HELD IN DEPOSIT 4,155.68

VALUES HELD FOR COLLECTION 64,647,482.32

VALUES HELD AS GUARANTEE 1,573,469,939.76

BANK GUARANTEES 139,612,552.93

LETTER OF CREDIT ISSUED 129,510,702.61

ACCEPTANCES OUTSTANDING 161,208,285.48

OTHER MEMORANDUM ITEMS 2,982,949,140.34

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Operating Profit and Loss For the six months ended 30 June 2013

DEBIT AMOUNT CREDIT AMOUNT

INTEREST EXPENSE 48,316,474.25 INTEREST INCOME 79,661,877.09

STAFF COSTS:

BANKING SERVICES INCOME 97,304.48

MANAGEMENT REMUNERATION 2,922,428.02 OTHER BANKING

SERVICES INCOME 12,359,690.84

EMPLOYEES REMUNERATION 3,520,728.40 SECURITIES & FINANCIAL

INVESTMENT INCOME 112,977.97

SOCIAL EXPENSES 261,932.70 OTHER BANKING INCOME 150,117.34

OTHER STAFF COSTS 228,588.00

THIRD PARTY SUPPLIES 149,064.28

THIRD PARTY SERVICES 5,401,595.67

OTHER BANKING EXPENSES 3,561,057.63

INDUSTRIAL AND OTHER TAXES 76,370.02

OTHER EXPENSES 65,919.99

DEPRECIATION AND AMORTIZATION 411,289.00

PROVISIONS FOR OTHER RISKS AND CHARGES 211,803.00

OPERATING PROFIT FOR THE PERIOD ENDED 27,254,716.76

TOTAL 92,381,967.72 TOTAL 92,381,967.72

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Net Profit and Loss For the six months ended 30 June 2013

DEBIT AMOUNT CREDIT AMOUNT

OPERATING LOSS FOR THE PERIOD ENDED - OPERATING PROFIT FOR

THE PERIOD ENDED 27,254,716.76

PRIOR YEAR LOSS - PRIOR YEAR GAIN -

EXCEPTIONAL LOSS - EXCEPTIONAL PROFIT -

COMPLEMENTARY INCOME (CORPORATE) TAX

- PROVISIONS UTILIZED -

NET PROFIT FOR THE PERIOD ENDED 27,254,716.76 NET LOSS FOR THE

PERIOD ENDED -

TOTAL 27,254,716.76 TOTAL 27,254,716.76

The Chief Executive Officer, The Head of Accounting, José Morgado Francisco F. Frederico Macau, 30 June 2013

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Governing Bodies Board of the General Meeting Maria de Lurdes Nunes Mendes da Costa (Chairperson) Rui Luís Cabral de Sousa (Secretary) Board of Directors Pedro José de Sousa Fernandes Homem (Chairman) José Manuel Trindade Morgado Carlos José Nascimento Magalhães Freire Jorge Manuel da Conceição Góis Manuel Alexandre da Rocha Barreto Paulo Jorge Gonçalves Dias Afonso Rui Manuel Fernandes Pires Guerra Paulo Jorge Carrageta Ferreira Amílcar Carlos Ferreira de Morais Pires Executive Committee José Manuel Trindade Morgado (Chief Executive Officer or “CEO”) Carlos José Nascimento Magalhães Freire (Deputy CEO) Jorge Manuel da Conceição Góis Manuel Alexandre da Rocha Barreto Rui Manuel Fernandes Pires Guerra Paulo Jorge Gonçalves Dias Afonso Paulo Jorge Carrageta Ferreira Supervisory Board Ricardo Abecassis Espírito Santo Silva (Chairman) José Manuel Macedo Pereira Joaquim Jorge Perestrelo Neto Valente

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Substantial shareholder of the Bank Ordinary shares of MOP1,000 each

Total number of ordinary shares

held

% of total issued shares

Banco Espírito Santo, S.A. 199,500 99.75%

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1 The Cash flow statement Operating activities Profit before taxation 27,254,717 Adjustments for:

Depreciation and amortization 411,289 Amortization of premium on securities

investments - Provisions 211,803 Gain on sale of shares, bonds and other

securities - Foreign exchange gain (45,600)

27,832,209 Decrease/(increase) in operating assets Change in loans and advances (18,559,574) Change in placements with foreign credit

institutions with original maturity over three months 1,109,471,050

Change in other assets 14,509,164 (Decrease)/increase in operating liabilities Change in deposits on demand 62,708,640 Change in fixed term deposits (1,257,024,122) Change in borrowings from local credit

institutions 4,850,000 Change in other liabilities 8,961,670 Change in other payables (3,324,914)

Cash (used in)/generated from operating activities (50,575,877)

Taxation paid -

Net cash (used in)/generated from operating activities (50,575,877)

--------------------

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1 The Cash flow statement (continued) Investing activities Proceeds from sale or redemption of

shares, bonds, and other securities - Purchase of fixed assets and deferred

expenses (57,957)

Net cash (used in)/generated from investing activities (57,957)

--------------------

Net increase/(decrease) in cash and cash equivalents (50,633,834)

Cash and cash equivalents at

1 January 2,366,760,410

Cash and cash equivalents at 30 June 2,316,126,576

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2 Off-balance sheet exposures other than derivative transactions

At 30 June 2013, the Bank had the following contingent liabilities and outstanding commitments:

(a) Off balance sheet items outstanding (contract amount) at the balance sheet date (in MOP): Bank guarantees issued 139,612,553 Values held in deposit 4,156 Values held as guarantees 1,573,469,940 Letter of Credit 119,742,367 Undrawn facilities 808,742,473 Risk participation 9,768,335 Acceptance outstanding 161,208,285

(b) Operating lease commitments

At 30 June 2013, the Bank had future aggregate minimum lease payments under operating leases as follows (in MOP): Up to one year 3,641,569 From one year to five years 2,859,172

6,500,741

3 Derivatives

As at 30 June 2013, the notional amount of interest-bearing off balance sheet financial instruments is as follows:

Notional amount

Credit risk weighted amount

MOP

In ‘000’ MOP

In ‘000’ Foreign currency swaps 2,174,207 0

The notional amounts of these contracts indicate the volume of transactions outstanding and do not represent amounts at risk.

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4 Related party transactions

The volume of related party transactions, outstanding balances at 30 June 2013 and related income and expense for the first six months are as follows:

(a) Transactions with key management personnel

Key management personnel of the Bank

In addition to the transactions and balances disclosed elsewhere in these financial information, the Bank provided commercial banking services to key management personnel of the Bank. The commercial banking services were provided in the ordinary course of business and on substantially the same terms as for comparable transactions with persons of a similar standing or, where applicable, with other employees.

(b) Transactions with group companies

The Bank entered into transactions with related parties in the normal course of its banking business including lending, acceptance and placement of inter-bank deposits, correspondent banking transactions and guarantees issued. The transactions were priced at the relevant market rates at the time of each transaction.

The amount of related party transactions during the six-month period is set out below (in MOP): Interest income 64,972,542 Interest expense 4,330,769 Commission received from services 3,888,388 Commission paid for custody service and

other services 7,388

The outstanding amounts of related party transactions as at the end of the reporting period are set out below (in MOP): Assets: Placements with foreign credit institutions 2,504,795,980 Sundry Debtors 468,183 Deposits on demand with foreign credit

institutions 99,409,605 Loans and advances to customers (forfeiting) 153,324,182 Interest receivables 13,826,214

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4 Related party transactions (continued)

(b) Transactions with group companies (continued)

Liabilities: Fixed term deposits 163,466,375 Current Accounts 11,481 Fixed customers deposits 606,496 Deposits on demand 586,299 Interest payables 31,670 Deferred income (forfeiting) 1,589,248 Off-balance sheet items: Guarantees taken 5,193,305

5 Capital

(a) Share capital

Authorized, issued and fully paid (in MOP): 200,000 shares of MOP1,000 each 200,000,000

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5 Capital (continued)

(b) Capital management

(i) Own funds

The Bank’s own fund as of 30 June 2013 amounted to MOP 465.03 million. The value of own funds is the sum of core capital and supplementary capital less the amounts subject to deductions (if there were any).

Component of own fund is as follows (in MOP): Share capital 200,000,000 Legal reserve 46,949,745 Other reserve 112,873 Retained earnings 180,989,444 Profit for the period 27,254,717

Total core capital 455,306,779 General provision/ Total supplementary capital

9,725,634

Total amount of own funds 465,032,413

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5 Capital (continued)

(b) Capital management (continued)

(i) Own funds (continued)

The Bank’s core capital consists of the following:

− Paid-up share capital pertains to 200,000 equity shares of authorized, issued and fully paid shares. The Bank does not have any other capital instruments except for these equity shares as qualifying capital.

− Legal reserve is a non-distributable reserve set aside from profit each year in accordance with Financial System Act of Macau (“FSAM”) which provides that an amount of not less than 20% of the profit after taxation be set aside each following year until the reserve reaches 50% of the Bank’s issued share capital and thereafter 10% of the profit after taxation be set aside each year until the reserve is equal to the Bank’s issued share capital.

− Other reserve pertains to the one-time transfer of retained profits in the prior year.

− Retained earnings are the accumulated undistributed profits, net of legal reserves set aside in accordance with FSAM. Profit for the year pertains to the income earned for the period.

The Bank’s supplementary capital represents the statutory reserves on general provision calculated in accordance with AMCM rules.

(ii) Operational Risk Adjusted Solvency ratio

As of 30 June 2013, the Bank has maintained an Operational Risk Adjusted Solvency Ratio of 32.06% against AMCM minimum regulatory requirement of 8%. The Operational Risk Adjusted Solvency Ratio is calculated with the Bank’s own fund expressed as a percentage of the sum of its weight credit risk exposures, weighted market risk exposures and weighted operational risk exposures. The solvency ratio is calculated in accordance with Notice no. 002/2011-AMCM.

The BES Group’s solvency ratio is 10.7%, calculated as the Group total Regulatory Capital over Risk Weighted Assets (“RWA”). BES Group’s Core Tier ratio was 10.4% meeting the Bank of Portugal’s minimum requirement of 10%. Under the European Banking Authority (“EBA”) calculation method, the Core Tier I ratio is 9.5% meeting the EBA minimum requirement of 9%.

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6 Credit risk management

(a) Geographic distribution of exposures The geographical analysis is classified by location of the borrowers after taking into account the transfer of risk. In general, risk transfer applies when a loan is guaranteed by a party situated in an area different from the counterparty.

(i) Geographical analysis of loans and advances to customers

Gross loans and advances to customers

Overdue loans and advances

(less than 6 months)

Specific provision made

MOP MOP MOP Macau SAR 438,107,153 429,434 211,803 -------------------- -------------------- ------------------ Of which: − Banks - - - − Government/Public sectors - - - − Others 438,107,153 429,434 211,803 Portugal 153,324,182 - - -------------------- -------------------- -------------------- Of which: − Banks 153,324,182 - - − Government/Public sectors - - - − Others - - - Hong Kong SAR 97,807,798 - - -------------------- -------------------- ------------------

-- Of which: − Banks - - - − Government/Public sectors - - - − Others 97,807,798 - - India 29,711,697 - - -------------------- -------------------- -------------------- Of which: − Banks - - - − Government/Public sectors - - - − Others 29,711,697 - -

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6 Credit risk management (continued)

(a) Geographic distribution of exposures (continued)

(i) Geographical analysis of loans and advances to customers (continued) Others 7,884,104 -

-

-------------------- -------------------- --------------------

Of which: − Banks 7,884,104 - - − Government/Public sectors - - - − Others - - -

Total 726,834,934 429,434 211,803

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(a) Geographic distribution of exposures (continued) (ii) Geographical analysis of investments in debt and other securities

Region Gross

Investments MOP Hong Kong SAR 35,266,926 -------------------- Of which: − Banks 31,958,800 − Government/Public sectors - − Others 3,308,126 United Kingdom 15,979,400 -------------------- Of which: − Banks 15,979,400 − Government/Public sectors - − Others - Netherlands 15,979,400 -------------------- Of which: − Banks - − Government/Public sectors - − Others 15,979,400

Total 67,225,726

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(b) Industry distribution of exposures

The following information concerning the further analysis of loans and advances to customers by industry sectors is prepared by classifying the advances according to the usage of the advances in respect of industry sectors.

Gross loans and advances to customers

Overdue loans and advance (less than

6 months)

Specific provision

made MOP MOP MOP Manufacturing 324,122,421 - - Construction and public works 13,843,000 - - Trading 132,481,783 429,434 211,803 Restaurants, hotels, etc 50,819,448 - - Transportation, storage and

communication 4,368,476 - - Personal loans 908,611 - - Banks and other monetary and

finance institutions 161,208,286 - - Housing business - - - Laundries and dyer’s shop 13,455,803 - - Property sales 7,526,948 - - Others 18,100,158 - -

726,834,934 429,434 211,803

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(c) Maturity analysis on assets and liabilities

Analysis of assets and liabilities by remaining maturity

The following maturity profile is based on the remaining period as at 30 June 2013 to the contractual maturity date: Maturity date of financial instruments

On demand Up to

1 month 1 to 3

months 3 to 12

months 1 to 3 years

More than 3 years

Within an indefinite period Total

MOP MOP MOP MOP MOP MOP MOP MOP Assets Cash and balances with and loans and

advances to banks 238,779,546 935,618,900 1,569,177,080 - - -

- 2,743,575,526 Other securities 3,258,537 - - - - - 63,917,600 67,176,137 Loans and advances to customers 54,630,229 93,502,724 152,612,425 105,322,017 320,555,736 - - 726,623,131 Interest receivables - 9,474,299 7,801,331 447,187 - - - 17,722,817

296,668,312 1,038,595,923 1,729,590,836 105,769,204 320,555,736 - 63,917,600 3,555,097,611

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(c) Maturity analysis on assets and liabilities (continued)

Analysis of assets and liabilities by remaining maturity (continued) Maturity date of financial instruments

On demand Up to

1 month 1 to 3

months 3 to 12

months 1 to 3 years

More than 3 years

Within an indefinite period Total

MOP MOP MOP MOP MOP MOP MOP MOP Liabilities Deposits and balances of banks and financial

institutions - 10,000,000 - - - - - 10,000,000 Deposits from non-bank customers 110,996,552 206,520,215 978,221,473 29,532,071 - - - 1,325,270,311 Deposits from public sector entities - 501,121,712 958,655,376 85,575,571 - - - 1,545,352,659 Deposits from holding and associated

companies 586,299 163,466,375 - - - - - 164,052,674 Interest payables - 2,984,026 5,177,746 645,245 - - - 8,807,017

111,582,851 884,092,328 1,942,054,595 115,752,887 - - - 3,053,482,661

Net asset (liability) position 185,085,461 154,503,595 (212,463,759) (9,983,683) 320,555,736 - 63,917,600 501,614,950

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(d) Analysis of past due assets

As of 30 June 2013, there were MOP429,434 that have been past due for more than 3 months but less than 6 months. This amount represents 0.06% of its total loans and advances. The amount of specific provision made was MOP211,803.

7 Market risk management

The capital charge for market risk calculated in accordance with Notice no. 011/2007-AMCM guidelines as follows:

MOP

In ‘000’ Capital charge on foreign exchange

Exposure/Total capital charge for market risk 27

Weighted Market Risk Exposure 340

8 Interest rate risk

Sensitivity analysis

The following table indicates the instantaneous change in the Bank’s economic values of own funds that would arise if interest rates to which the Bank has significant exposure at the balance sheet date had changed at that date, assuming all other risk variables remained constant. Actual changes in the Bank’s economic values of own funds resulting from the change in interest rates may differ from the result of the sensitivity analysis.

As of 30 June 2013, interest rate risk weighted position on all currencies, measured as its impact in the economic values of own funds as follows:

MOP

In ‘000’ MOP (2,541) HKD 151 USD 3,248 The impact on economic value as a percentage of our own funds is 0.2%.

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9 Foreign exchange risk

The following table indicates the concentration of currency risk as of 30 June 2013:

(In thousand of MOP equivalent) HKD CAD CNY EUR GBP USD Spot assets 196,339 117 91 99,220 128 2,983,754 Spot liabilities (38,580) - - (99,254) - (799,546) Forward sales - - - - - (2,172,805)

___________

Net long (short) position 157,759 117 91 (34) 128 11,403

10 Liquidity risk

(a) Average liquidity

(i) Average weekly liquidity for the first six months MOP

In ‘000’ Minimum weekly cash in hand 62,526

Average weekly cash in hand 229,774 The average weekly liquidity is computed as the product of specified assets and liabilities by proportion designated in accordance with AMCM’s requirements, as reported in the weekly return submitted to AMCM.

(ii) Liquidity ratio for the first six months In Percentage 1 month current ratio 108.77% 3 months current ratio 260.32%

The liquidity ratio is computed as the simple average of the percentage of specified assets to liabilities in the last week of each calendar month in accordance with AMCM’s requirement, as reported in the monthly return submitted to AMCM.

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10 Liquidity risk (continued)

(b) Average solvency assets MOP

In ‘000’ Average specified liquid assets 3,226,033 Average total basic liabilities 3,061,914 Ratio of specified liquid assets to basic liabilities 105.59%

The average ratio of solvency assets to underlying liabilities is computed as the simple average of each calendar month’s average ratio in accordance with AMCM’s requirement, as reported in the monthly return submitted to AMCM.

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